4 - The role of multinationals in corruption in the Asia-Pacific region

Abstract

Multinational enterprises (MNEs) can participate in or decline to engage in host country corruption, and then further resist or support national anticorruption campaigns. This chapter draws on three sources concerning the role of MNEs in Asia-Pacific corruption: relevant literature, corruption information, and reports on recent cases of MNE misconduct in the region. Transparency International (TI) provides 2011 bribe payers index (BPI) information on MNEs from 28 large economies; and 2015 corruption perceptions index (CPI) information on those 28 countries and all other Asia-Pacific countries. Asia-Pacific is a geographically, culturally, economically, and politically diverse region. Major economies with significant MNEs are Australia, China, Hong Kong (part of China), Japan, India, Indonesia, Malaysia, Singapore, South Korea, and Taiwan. While New Zealand has some important exporting companies, the country is not a major economy. Other economies, typically without significant MNEs, are Afghanistan, Bangladesh, Bhutan, Brunei, Darussalam, Cambodia, Laos, Mongolia, Myanmar (Burma), Nepal, North Korea, Pakistan, Papua New Guinea, the Philippines, Sri Lanka, Thailand, and Vietnam. Canada, Russia, and the USA bordering the North Pacific are excluded in defining this region, as is Central Asia beyond Afghanistan. There is no automatic association between MNE bribe paying conduct and level of domestic corruption in MNE home and host countries. Some MNEs from relatively clean home countries may pay bribes; some MNEs from relatively corrupt home countries do not pay bribes. The chapter discusses the relationship of the supply-side and the demand-side of corruption markets. There are different kinds of corruption across the region. The chapter includes information on bribe paying, domestic corruption, recent enforcement actions, anticorruption reform efforts, and some specific MNE cases occurring in a variety of Asia-Pacific countries. China and India are engaged in anticorruption campaigns. USA and European anticorruption enforcement efforts are increasing.